Sell Value NOT Price
Enhancing margins can mean either a higher margin percentage and/or more margin dollars per sale. Depending on the desired effect, several choices are available. The easiest way to improve margin is to sell the real and total value of the product and/or service as it relates to the specific client. Selling the right values to the right people is key to your success. This is possible in most selling environments; however, if all you are selling is price – low dollar wins. That’s bidding for business, not real selling; You don’t need a sales professional for this type of transaction – an automated bid computer or clerk will do just fine.
Traditional Salespeople and Peddlers
Approximately one-third of most sales organizations will never be able to consistently sell value to their clients. Many salespeople cannot sell value. They do not know the client’s business or their competition; nor do they understand the full value impact that their products and services have on the client or the client’s client. As a result they are relegated to bidding for business. They may even be happy to get an order at a loss; after all, you can always “make it up on volume or the next order” – Right?
The 1% Rule
Very few if any sales are lost because of a one percent (1%) increase in price if the value has been both quantified and qualified with the client’s agreement. But if the client does not see the value or agree with the quantification, you have not sold the value – you’re still bidding on price. Assume for a moment that you are able to get one percent (1%) more on every order booked/shipped last year. What impact would that have made on your pretax bottom line? How many dollars would that have been, and what percent impact would this have made on your earnings?
Okay, the one percent (1%) drops straight through to the bottom line – wow!
What’s In It for You?
In most companies a one percent (1%) or more increase in margin is thought to be an impossible task because of its traditional approach to selling. Old-line thinking will always produce old-line results. The companies that shift the paradigm and become value centric go on to be the industry leaders at the expense of their competitors; those that do not shift become acquired for pennies on the dollar or simply just fade away. The people who initiate the change and become part of it will become tomorrow’s leaders, whereas those who embrace the status quo will be looking for employment in the future.
What Makes Us Different/Why Us?
We recognize that cash is king. The only consistent way to get more of it is by retooling the sales organization, changing it from the traditional approach to a value oriented selling approach. Today the successful sales professional must be a knowledgeable business consultant with a keen eye on what is of value to the client and why. We place extreme emphasize on the quantification and qualification of the value chain for the client as well as the requirement for key personal relationships at strategic levels within the client organization. The Monthly Value Reporting System is a significant tool for re-enforcing value throughout the organization.
Key Tools, Processes and Concepts that support enhanced margins:
Selling Value NOT Products/Service
WIIFMe (Personal Motivation)
1 Page Business Plan
1 Page Closing Plan
Dynamic Relationship Plan
Target Opportunity Reviews
Major Account Reviews
Monthly Value Reporting
HVS Education Seminars